IVAs and Personal Gaurantees

Hello, I hope that someone can help me with this question.

My business went bust last September leaving me with some quite considerable debt. Included in the overall debt is around £35K owing to two banks for which myself and my former business partner signed a personal gaurantee.

The PGs are "joint and several" meaning that the banks don't care which one of us pays the debt so long as they get their money out of one or both of us.

Currently my former business partner and I continue to make small (and equal) monthly payments towards the PGs.

My former partner is now considering entering into an IVA (for myself I prefer not to go down this route and instead my intention is to pay off my debts and my share of the PGs over the next 2 or 3 years).

My question is, if my partner starts an IVA, what happens with the PGs? Will he be able to have the PGs included as creditors in the IVA and, that being the case, could I become liable for what should be his share of the debt as well as mine?

Any ideas?



  • thegrimreaper
    thegrimreaper Posts: 77 Forumite
    edited 26 April 2009 at 11:59AM
    I used to work for a company that used to give pg's to account customers to allow them to increase credit, the way we did it was we would (if more than one director signing) ask them to sign for half the balance each that we were offering them as credit, are you signed for any specific amount each or just both signed to cover the balance? * i think you may in a way have answered this above when i reread it but just wanted to confirm if you have a limit each to which your liable*
    Debt Free 20/05/2009 (except for bank of mum) currently £750 left !!:beer:
  • Cooky99
    Hi, thanks for responding.

    The PGs are joint and several meaning that we have both agreed to pay back the full amount. The idea of "joint and several" is that if one of the business partners can't pay, the other partner pays the lot.

    Alas, when signing the PG, I didn't consider what might happen if my former business partner were to avoid the responsibility by way of an IVA.

    If he had died or been unable to pay his share due to ill health and being out of work then fair enough. It would seem reasonable that I should repay all of the debt.

    But I wonder if I have any "get out" from repaying the full debt when my former partner avoids the responsibility by taking out an IVA?
  • Cazliz
    Cazliz Posts: 4 Newbie
    edited 26 April 2009 at 6:33PM
    Hi Cookie.
    I can't comment on your situation, never run a business. But I just wondered if you gave spoken to your partner about his pending IVA? Is he going to add his share of these debts to it? I'm sure he would have to mention them and they maybe need to be included :confused:
    I, just worry when people talk about IVA's as a way of avoiding the responsibility. For many it is just a way of managing their responsibilities when faced with a debt crisis they can no longer deal with in the agreed way. Maybe it's a question you need to ask, after all if he is seeing it as a way of shirking responsibility, wouldn't that make you one of his creditors?:confused: and if he is not, then he can Im sure, arrange to pay his share.
    Maybe ask the question on IVA.co.uk there would be plenty there able to offer advice.
    Good Luck
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